Senator Hillary Clinton Proposes Government 401(k)
Matches

October 9, 2007 (PLANSPONSOR.com) - On a campaign
stop in Iowa on Tuesday, Senator Hillary Rodham Clinton
proposed legislation that would ensure a dollar-for-dollar
government match on the first $1,000 of employee 401(k)
contributions.

According to a
statement
, the match would only apply to 401(k) plan participants
earning up to $60,000; however, for those earning between
$60,000 to $100,000, the government would give a 50%
tax credit for the first $1,000 contributed by
employees.

Clinton (D-New York), a presidential hopeful, also
proposed a retirement savings vehicle for individuals not
covered by 401(k) plans. With the so-called
American Retirement Accounts, which would allow a pretax
contribution of up to $5,000 a year, individuals would
get the same proposed government matches as those with
401(k) accounts. For these accounts individuals
would be able choose their own retirement plan
provider.

The American Retirement
accounts will provide “universal access to
a generous 401(k) for all Americans,” and
help the individuals “who are currently falling
through the cracks of our system, while reducing wealth
inequality, increasing national savings, and encouraging
economic growth. And they will ensure all Americans can
save and build wealth for their retirement,”
according to the statement.

The American Retirement Accounts would allow
individuals to make withdrawals for such expenses as a
down payment on a home or for education expenses.
Withdrawals of up to 15% of account balances would also
be allowed during periods of extended unemployment – with
no penalty.